Please ensure Javascript is enabled for purposes of website accessibility

Alphabet, Inc. Earnings: 7 Standout Metrics Investors Loved

By Daniel Sparks – Feb 3, 2016 at 7:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Mobile search is driving revenue higher and YouTube is as hot as ever. Here's a look at these growth drivers, along with other key metrics that impressed investors.

After Alphabet (GOOG -0.19%) (GOOGL -0.21%) overtook Apple on Tuesday as the most valuable publicly traded company following the online search giant's better-than-expected results, investors are digesting all of the new information the company shared with investors.

Here's a look at seven impressive metrics from the report that may be behind the market's increased confidence in the company.

1. Revenue increased by 18% compared to the year-ago quarter. This is an acceleration from the 15% year-over-year revenue growth the company reported in the fourth quarter of 2014.

Further highlighting the strength of Alphabet's overall business, revenue growth was 24% in constant currency.

2. Google sites revenue was up 20% year over year. Sequentially, it was up 14%. This strong growth validates the health of Alphabet's core business, as its Google sites segment represents the lion's share of its overall revenue and operating profits.

The key driver for this important segment? "[S]ubstantial strength in mobile search," explained Google CFO Ruth Porat during Alphabet's fourth-quarter earnings call.

3. Paid clicks on Google sites soared 40%. This huge jump in paid clicks, which the company defines as the number of clicks advertising partners paid Google for, was driven primarily by the impact of YouTube's successful TrueView ad product.

Notably, the TrueView product was also a primary reason for the 16% year-over-year decline in cost-per-click, or the average amount paid per by advertising partners to Google per click, for Google sites. But the outsized gain in paid clicks was well worth the slight decline in cost-per-click, helping drive significant growth in Google sites' overall revenue.

Aggregate year-over-year percentage changes in paid click and cost-per-click across both Google websites and Google network members' websites was an increase of 31% and a decrease of 13%, respectively.

4. Six of Alphabet's consumer products have over one billion monthly active users. Those products are Search, Android, Maps, Chrome, YouTube, and Google Play. So, Facebook isn't the only company crushing it when it comes to users.

5. Time people spent watching YouTube in the living room more than doubled in 2015. Doubt no more: YouTube's addressable market now unequivocally includes cable network customers -- not just other online streaming services.

Image source: YouTube.

6. YouTube users watch hundreds of millions of hours of video everyday. This is likely well ahead of Facebook's recently reported metric on daily viewing hours of "more than 100 million." While YouTube's lead over Facebook on daily viewing hours isn't surprising, it's good to see that the lead is still probably significant.

7. Total small and medium-sized businesses advertising on YouTube doubled during the past two years. "Brands turn to YouTube to inspire and engage potential customers," said Google CEO Sundar Pichai during the Q4 call, "And it is brands of all sizes."

Overall, the market definitely has reasons to be optimistic about Alphabet's business. Impressive revenue growth and healthy user platforms suggest the company is firing on all cylinders.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Apple, and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet (A shares) Stock Quote
Alphabet (A shares)
GOOGL
$101.43 (-0.21%) $0.21
Alphabet (C shares) Stock Quote
Alphabet (C shares)
GOOG
$102.22 (-0.19%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.